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China's factory activity shrinks for second straight month

News | 2026/08/31 01:40

China's factory activity shrinks for second straight month

Manufacturing activity has contracted, but less than expected

China's manufacturing activity shrank for a second straight month, though by less than economists forecast in August:

The official PMI edged up to 49.8 in August, better than Reuters-polled economists' forecast of 49.6:

Economists expect better growth for the rest of the year, as adverse weather fades and local governments accelerate fiscal spending:

China's economy has come under mounting strain, with growth slowing to 4.3% in the second quarter, the weakest pace since late 2022:

Stimulus trickling in

Economists expect better growth for the rest of the year, as adverse weather fades and local governments accelerate fiscal spending:

Beijing is likely to further accelerate fiscal spending as policymakers have grown increasingly worried over the collapse in urban investment:

Supply and demand both improved in August, according to the NBS release, with the sub-indexes tracking production and new orders expanding to 50.4 and 50.6, respectively:

New export orders rebounded to 50.1 in August:

Overall, firms appeared to be anticipating a boost to economic activity as local governments step up spending over the rest of the year:

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